MFs get record monthly SIP inflows

Inflows into mutual fund schemes through the so-called systematic investment plan (SIP) route hit a record high of Rs 4,584 crore in May. SIP inflows were 44 per cent higher compared to the corresponding month of last year and 20 per cent more than one-year average.

SIP is an option wherein an investor makes a recurring commitment to put in a fixed income periodically. SIPs, as opposed to lump sum investments, help mitigate risk, particularly when the markets are trading at near record levels.

Even the mutual fund industry benefits from SIPs flows as they are consistent in nature. The industry has been creating a lot of awareness investing through this route. Market players say inflows through the SIP route will only increase from current levels. Broking firm Geojit Financial Services in a recent note said SIP flows could double to Rs 10,000 crore in next two years. “Investors are increasingly coming to equity markets through SIP route, leading to a sudden spike in SIP folios in the past one year and the trend is likely to gather more speed over the next couple of years," the brokerage says.